The national income of a country for a given period is equal to the

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total value of goods and services produced by the nationals

sum of total consumption and investment expenditure

sum of personal income of all individuals

money value of final goods and services produced

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This question was previously asked in

UPSC IAS – 2013

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National income, strictly defined (like NNP at Factor Cost), represents the total income earned by the residents (nationals) of a country. Among the given options, the total value of goods and services produced by the nationals corresponds to the Gross National Product (GNP), which is a measure of the total economic output attributable to the residents of a nation, regardless of the physical location of the output.

While Gross Domestic Product (GDP) (defined in option D) measures the total value of goods and services produced within a country’s borders, National Income (NI) conceptually aligns more closely with the income accruing to the residents of the nation. GNP is the aggregate most directly linked to “production by nationals”. National Income (NNP at Factor Cost) is derived from GNP (NNP at Market Price minus Net Indirect Taxes).

Option B describes the expenditure side of GDP calculation. Option C describes personal income, which is a part of national income but not the total. Option D describes GDP. While GDP is a crucial measure, the term “national income” often implies a focus on the income or production attributable to the nation’s residents (GNP) or the net income available to factors of production (NNP at Factor Cost). Given the options, A is the most appropriate choice representing the productive output linked to the “nationals”.

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